Strong Growth for ASSA ABLOY in All Parts Except Europe

ASSA ABLOY reported its results for the third quarter of 2013 ad the first nine months of 2013. Sales in the third quarter rose by 5%, with organic growth of 3%, and totaled SEK 12,131 M ($1.286 billion). The company reported strong growth in Americas, Asia Pacific and Global Technologies, and stable but low demand in EMEA and Entrance Systems.

Operating income (EBIT) increased by 8% and amounted to SEK 2,090 million. The operating margin was 17.2%. Net income amounted to SEK 1,474 million.

In addition, contracts have been signed for the acquisition of Ameristar (USA), Mercor (Poland), Xinmao (China) and Huasheng (China), which have combined annual sales of around SEK 2,000 M.

“I am very pleased to report that Americas, Asia Pacific and Global Technologies all had strong organic growth,” said Johan Molin, president and CEO. “EMEA also grew, by 1% organically, and showed clear signs of having bottomed out, while Entrance Systems had a surprisingly small fall of just 1% despite its exposure to European industry. Total growth for the Group was 6% in local currencies, made up of 3% organic growth and 3% acquired growth. Exchange-rate effects remained negative at -1%, which meant that total growth ended up at 5%.

“The Group’s earnings reached a record level, largely due to good growth arising from new products, which accounted for 26% of sales value, with growth in electromechanical products especially strong. In addition, major savings and efficiency measures in production continued to make good contributions to earnings,” he added.

“Agreements of acquisition where signed with several interesting companies during the quarter,” Molin stated. “Especially exciting is the acquisition of Ameristar, which complements our product portfolio in North America very well. Investment in emerging markets also continued with the acquisitions of Mercor in Poland and Huasheng and Xinmao in China. In total, these acquisitions will provide an addition of around SEK 2,000 million to our sales.

“My judgment is that the world economy is slowly on the way to improving, although still affected by the budget cutbacks that many countries are making,” Molin concluded. “Our strategy therefore remains unchanged, to reduce our dependence on mature markets and to expand strongly in the emerging markets, which are expected to go on growing well. Another continuing priority will be investments in new products, especially in the growth area of electromechanics.”

Sales for the first nine months totaled SEK 35,239 million ($5.4 billion), representing an increase of 2%. Organic growth was 2%. Acquired units contributed 4%. Operating income before depreciation, EBITDA, for the part-year period amounted to SEK 6,477 million. The corresponding margin was 18.4%.